Freedom Initiative

As China expands its regime of mass data-collection worldwide, Chinese tech giant ZTE and the Beijing-funded cultural centers known as Confucius Institutes are collaborating in countries around the globe.

U.S. lawmakers already perceive ZTE as a conduit for Chinese surveillance. In recent months, the tech company has come under fire for flouting American sanctions in its business dealings with Iran and North Korea. U.S. lawmakers including Marco Rubio and Mark Warner have called the company a national-security threat, and directors of several U.S. intelligence agencies have warned Americans against using ZTE products due to its collection capabilities and close ties to the Chinese government.

But those ties to Beijing may be more complex than lawmakers understood. Research conducted by The Daily Beast reveals that ZTE has also been working for more than a decade with the Confucius Institutes—a soft-power arm of the Chinese government, already embedded on more than 100 U.S. college campuses. The two organizations have hosted each other’s visiting delegations, sponsored joint events, and ZTE has provided equipment and training for the Confucius Institutes in countries from Cuba to Zambia. ZTE even co-founded one Confucius Institute.

The Institutes, which provide Chinese-language and culture classes at schools in more than 140 countries around the world, have attracted criticism for their heavy-handed censorship of topics the Chinese government deems politically sensitive, and some U.S. lawmakers have warned they may also be national-security risks. Lawmakers recently introduced a bill that would require the institutes to register under the Foreign Agents Registration Act, meaning they would have to disclose their activities and funding to the Department of Justice.

The collaboration between Confucius Institutes and ZTE goes back to the earliest days of the Confucius Institutes, the first of which was established in 2004. The tech firm co-founded the Confucius Institute at University of Poitiers in France in 2005 and provided it with remote-learning technology.

The joint efforts are now being viewed in a new light, as China is constructinga “social-credit system,” which uses big-data analysis to rate people and companies according to their behavior, then uses those ratings to stipulate punishments and rewards. A new report released Wednesday by the Australian Strategic Policy Institute outlines how China is extending the social-credit system beyond its borders, and shows that Beijing increasingly views Confucius Institutes as a potential way to collect data outside China, particularly as part of its Belt and Road Initiative, Chinese President Xi Jinping’s signature foreign-policy project that lays out a vision for a China-centric world in the 21st century.

In many respects, the relationship between ZTE and the institutes makes sense. Both are global organizations with close ties to the Chinese government, and both offer a positive vision of Chinese soft power in strategic sectors like technology and education.

ZTE donations of equipment to Confucius Institutes have been feted at the highest levels of government. In October 2010, Chinese Premier Wen Jiabao and Greece’s prime minister both attended a ceremony marking ZTE’s donation of remote-learning video equipment to the Business Confucius Institute at Athens University of Economics and Business.

Confucius Institutes and Chinese tech firms including ZTE are also linked to the Belt and Road Initiative. ZTE Chief Information Officer Chen Jie said in December 2016 that the company can help build an “information superhighway” connecting countries across the Belt and Road, adding that ZTE also has a presence in 50 of these countries.

In May 2017, for example, ZTE donated a “smart classroom” to a Confucius Institute in Samarkand, Uzbekistan; the donation ceremony included a presentation on the Belt and Road Initiative. The China-Pakistan Economic Corridor, part of the Belt and Road, includes plans for the installation of high-tech surveillance equipment in key cities around the country.

China wants more control over what people and companies around the world are saying and doing, writes Samantha Hoffman, a researcher who specializes in the intersection of state security and technology at the Mercator Institute of China Studies in Berlin, in her new report “Social Credit: Technology-Enhanced Authoritarian Control with Global Consequences.”

But such control first requires more information. That’s where data-collection and the social-credit system come into play. Chinese officials have emphasized that China must increase its “collection power,” writes Hoffman; Lu Wei, China’s former internet czar, defined collection power as being able to “collect information from all areas in the world in real time.” In a 2010 speech, Lu said that “collection power decides communication power, communication power decides influence, and influence decides soft power.”

Hoffman’s report notes that an article published in 2015 in a Chinese military-affiliated journal proposed that Confucius Institutes could serve as “data courier stations,” feeding information back to Beijing to help create a Belt and Road “decision-making system” based on big-data analysis.

“The problem we face in identifying potential wrongdoing is that technology and processes we are talking about as potentially problematic are embedded in normal, innocuous everyday activity that legitimately optimized services. In this case this would be the education a Confucius Institute provides.”

Data collected from Confucius Institutes could, of course, be used simply to inform future teaching methods. But voice-recognition and keyword-identification software could also be used for surveillance related to national-security aims.

When it comes to Chinese tech giants like ZTE and iFlytek, which provides software to Confucius Institutes, “the technology does what it says it does,” said Hoffman. “But then there’s the question of what else it does.”

“The problem we face in identifying potential wrongdoing is that technology and processes we are talking about as potentially problematic are embedded in normal, innocuous everyday activity that legitimately optimized services,” said Hoffman. “In this case, this would be the education a Confucius Institute provides.”

Universities should make sure they fully understand the details and implications of on-campus collaboration between Confucius Institutes and Chinese tech firms, Hoffman argues. “What kind of data is collected?” she said. “What programs are they using, are they the same that the rest of the university uses?”

Technology and equipment donation isn’t the only collaboration between ZTE and the institutes. The two organizations have also co-hosted events and training in countries around the world. In 2016, for example, the Confucius Institute at the University of Havana held a Chinese-language training module for 12 non-Chinese employees from ZTE’s representative office in Cuba. Other joint events have been held in Greece, Zambia, and France, among other countries.

Huawei, another Chinese telecommunications firm with operations around the globe, has also faced national-security concerns in the United States, and it too has partnered in similar ways with the Confucius Institute, including on U.S. soil.

Per Huawei’s request, the Confucius Institute anchored under the University of Texas at Dallas provided a class on Chinese language and culture to non-Chinese-speaking Huawei employees in 2009. The class was also streamed to Huawei branch offices in California, New Jersey, and Illinois.

The Trump administration slapped tough restrictions on ZTE in April, but quickly reached a deal in June easing the measures and levying a large fine instead. Little explanation was given for the sudden reversal.

Graham Webster, a fellow at the DigiChina Project at New America, said that the U.S. government has not done enough to make public the evidence behind its scrutiny of Chinese tech firms like ZTE. The lack of transparency muddies the waters about the true nature of U.S. concerns about Chinese tech firms.

“If the risks are real, they should be made more clear to the public, both so that people can take appropriate measures and so that with evidence there’s less ambiguity or potential to see politics where there is really security at play,” said Webster.

—with additional reporting by Amy Cheng